Let’s Make a Deal . . . or not
I thought it might be nice to write something about the NFL Network without inserting a footnote after every sentence. Rest assured, I’ve done my research. As you might know, the NFL Network and Comcast have been battling in court for the past few years. There are two distinct cases. One is before the FCC and concerns the NFL Network’s claim that it has been discriminated against by cable providers, including Comcast. The other case is in the New York state court system and concerns contract interpretation. The latter dispute turns on a couple of paragraphs in two letters and whether those paragraphs are to be read separately or as a whole. That may be a little oversimplified, but that’s the crux of it.
And that’s why this piece focuses on the importance of careful drafting. Contracts aren’t sexy. Often they’re as boring and dry as the conversation at a Bob Dole fundraiser. Not many would claim to enjoy drafting or reviewing contracts–it is generally tedious and time-consuming work. But the importance of careful drafting cannot be overstated. A misplaced comma or conjunction can result in years of litigation. “Haste makes waste” goes the old saw, and nowhere is this truer than in contract preparation.
Lawyers are sometimes tempted to use “boilerplate” to prepare a contract. While there is nothing inherently wrong with using boilerplate, overreliance can have disastrous results–both for you and for your client. This is because boilerplate is–by its very nature–general. It isn’t unique to your situation. So, even the “best” boilerplate will not always be appropriate. You wouldn’t serve filet mignon to a vegetarian, and even the “best” boilerplate will not always be well received. I suggest using boilerplate as a tool to hone your own drafting skills. Consider what works and what doesn’t, and from there, craft your own provisions.
Pay attention to definitions. If a term has potential for ambiguity, make sure to define its use within the contract. Don’t take anything for granted. Transactional lawyers need to be careful. A good approach is to assume that everything that can go wrong will go wrong (a “Murphy’s Law” approach, if you will). After you’ve assumed that everything will go wrong, consider how you will address those potential problems. What law will apply in a dispute? How should the contract be read? What process will be used to resolve disputes? What else might need to be addressed? If you answer these questions beforehand, you’ll be much better off later. A transactional lawyer should always be focused on prevention. Badly drafted contracts keep litigators busy. Your goal should be to give the litigators as little business as possible.
If you want to be a good sports and entertainment lawyer, then read as many contracts as you can. Look to the contract-interpretation cases to learn what not to do. Remember–nearly all those cases focus on badly written contracts. The well-written ones don’t make it into court. Learn to write clearly, concisely, and accurately. If a sentence or clause could potentially be interpreted in more than one way, rewrite it until there is only one possible meaning.
Clarity is essential to a well-crafted contract. By “clarity” I don’t mean that the provisions are clear to someone with a graduate education–I mean that the provisions would be clear to a six-year-old. Gone are the days when lawyers could draft sneaky language into a contract to “trick” the other party. Courts now will construe a contract against the drafter. A contract that can only be construed one way is a work of art. Simplicity is elegance.
When you write a contract that anyone can understand, you’ve accomplished more than closing the deal. You’ve made sure that everyone involved understands what is expected. You’ve avoided possible litigation, and you’ve made sure that if there is a dispute, its resolution will be somewhat predictable. Follow these basic principles and you will serve yourself and your clients well.
If the lawyers at Comcast and the NFL Network had paid attention to these basic principles, both sides could have avoided litigation. I know–I’ve read the letters in dispute. One sentence could have prevented a great deal of court time and expense. All the parties needed to do was stipulate how the letters should be read–in conjunction or separately. That’s all. Instead, both sides are bitter and upset. In the end, neither side is likely to get exactly what they want.
At least the litigators are happy.
For a look at one of the first (unpublished) decisions in this case–and a general overview of the issues–click here.